Two hoses were trained on the north side of the building Monday August 4, 2014. San Francisco firefighters battled a smokey fire at the shuttered Renoir Hotel on McAllister Street. Fire crews closed Market Street and adjoining avenues pouring water into the hotel.

Spectators were kept back on McAllister Street as windows were being broken in the Renoir Monday August 4, 2014. San Francisco firefighters battled a smokey fire at the shuttered Renoir Hotel on McAllister Street. Fire crews closed Market Street and adjoining avenues pouring water into the hotel.

Smoke could be seen coming from the windows of hotel being renovated Monday August 4, 2014. San Francisco firefighters battled a smokey fire at the shuttered Renoir Hotel on McAllister Street. Fire crews closed Market Street and adjoining avenues pouring water into the hotel.

Seven construction workers at the Renoir Hotel, which is undergoing...

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On Market Street, fire fighters fought the fire with two unmanned hoses and shut down the roadway Monday August 4, 4014. San Francisco firefighters battled a smokey fire at the shuttered Renoir Hotel on McAllister Street. Fire crews closed Market Street and adjoining avenues pouring water into the hotel.

Smoke could be seen coming from the windows of hotel being renovated Monday August 4, 2014. San Francisco firefighters battled a smokey fire at the shuttered Renoir Hotel on McAllister Street. Fire crews closed Market Street and adjoining avenues pouring water into the hotel.

Photo: Brant Ward, The Chronicle

Smoke could be seen coming from the windows of hotel being...

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Firefighters atop ladders battle the three-alarm fire at the shuttered Renoir Hotel in San Francisco.

San Francisco firefighters contained a three-alarm blaze Monday in a hotel that was undergoing a $30 million renovation near Civic Center - the second time in five months that flames have ripped through a large development project in the booming city.

The blaze was reported at 12:03 p.m. at 45 McAllister St., the site of the shuttered Renoir Hotel, city fire officials said. Seven construction workers were taken to hospitals to be treated for smoke inhalation, officials said.

Gray and white smoke hung over the area after the fire broke out, with the smell spreading for several blocks. Hundreds of gawkers crowded nearby streets, snapping photos of firefighters in action.

City fire spokeswoman Mindy Talmadge said the fire spread from the lower floors, moving upward through a stairwell. Firefighters went into defensive mode about 12:45 p.m., pouring water from above to saturate the building as they waited for inspectors to confirm the building wasn't going to collapse.

There were reports of a couple of explosions, Talmadge said, but firefighters believe they were propane tanks. The blaze was contained about 2:30 p.m.

Charles Crowder, who works at City Hall, said he had left for his lunch break when he spotted the flames and called 911.

"I heard all the guys hollering and yelling," he said. "It was just getting bigger and bigger. It was growing fast. There was smoke coming out of all the windows."

A construction worker, who asked not to be identified, said he believed the fire started from welding work on the second floor. He was outside when the flames began. The general contractor called the Fire Department right away, he said, and he called his friends who were working on the roof.

"I wasn't really scared, but I was scared for the guys up top, so I called them right away," he said.

Crews were mostly doing demolition work in the building, he said.

Fire Chief Joanne Hayes-White said the department has been reaching out to construction companies regarding their sites' vulnerability to fires, especially in light of a five-alarm blaze that gutted an apartment project in the Mission Bay neighborhood on March 11.

That fire - the city's biggest in years - was accidental and may have been caused by sparks flying from a welding or grinding job, according to a Fire Department report. The fire caused $40 million in damage to the six-story, block-size building at 1200 Fourth St., which was self-insured by the builder.

"The Mission Bay fire was more challenging" than Monday's blaze, said Hayes-White, "but anytime a building is under construction, it's a lot more vulnerable."

The hotel fire shut down Market Street and other roadways, snarling traffic. Neighborhood residents were not allowed back to their homes while firefighters worked.

The renovation of the Renoir Hotel is considered a centerpiece of the revitalization of the Mid-Market neighborhood. The project is being built by the Kor Group, which made its mark in New York and Los Angeles with the trendy Viceroy hotels.

The new Renoir, which has not yet been named, will include a 4,500-square-foot roof deck bar and lounge. In addition, the Kor Group is planning three restaurants and bars on the ground floor.

Construction started in April. It was unclear late Monday how much the fire will affect the timetable.

"We are just going to go back to work tomorrow," said Eric Horn, a principal with project contractor Build Group.

"We are just thankful that the firefighters were there for a quick response and no one was hurt. It was a good effort by everybody to get this thing under control quickly."

As the fire erupted, construction managers were meeting with project architect Jim Devlin of Hornberger + Worstell. "They heard all this yelling, and everyone's walkie-talkies started squawking," said Mark Hornberger, the firm's founding principal.

Because the project was still in the demolition phase, elevator shafts and stairwells were open, which probably allowed the smoke to spread faster. But Hornberger said the building's historic interior materials - the plaster and marble work in the lobby - seemed to have survived.